Netflix is moving on from the Russian market. The streaming service announced that they will be discontinuing their operations on state-run television channels in Russia and are now focusing on expanding their services to other countries.Russian services.
With a slowing economy and stricter regulations and taxation, Netflix’s move seems like an attempt to get around these restraints and support the local economy.
Netflix will continue to offer their streaming services for the Russian based population but without the support of the state-run television channels.
The issues affecting Netflix in Russia, according to Business Insider, are the same issues that are being experienced by other services such as Apple and Google.
The Huffington Post mentions that Netflix was experiencing a decline in their Russian subscribers and was proposing new prices on their subscription plans.
The Huffington Post also mentions how the Russian government is doing its best to make it hard on services such as Netflix and Google. Apple, for example, has been forced to pay a 37% tax on all sales of their devices in Russia despite having no plans to grow their services in the region.
Netflix is moving away from the state-operated channels in Russia run by Rossiya 1, 2, and 3 with a new streaming service offered on a country-by-country basis.
The original three networks will still be available on Netflix’s main global service.
Netflix plans to make this change to its business model because they believe their brand and platform are stronger internationally than in stateside Russia. In addition, they cannot use these state-run channels to their advantage as Netflix would have wanted to do with an American presence.
This means less of these channels being watched by those living outside of Russia and will mean less revenue for Netflix domestically.
In the past, Netflix has had to work within the confines of countries that want to create legislation to limit its content.
In China, for example, TV programs are censored on streaming services if they are deemed too violent, sexual or politically offensive. It is unlikely that Netflix would comply with these rules in Russia and similar locales.
This decision was made after the breakdown between Netflix and Gazprom Media in June 2017. Gazprom Media owned these three channels and TNT and other popular Russian networks.
Netflix believed that they could not proceed with plans in Russia as long as Gazprom Media was involved due to this breakdown in contract negotiations.
Gazprom Media also owns other popular international networks such as HBO, BBC, and NBC. Netflix also had limited access to these channels in other countries because of this breakdown in contract negotiations.
“Given the current situation, we have no plans to add these channels to our service,” a Netflix spokesman said in a statement.
With the new platform that Netflix is implementing, their new three-out-of-five plan will provide customers in Russia with a Netflix account, regardless of where they subscribe to the service.
The new platform will be a completely standalone streaming service for Russia and will not be integrated into any of the current Netflix plans available globally. This means consumers will be able to choose which method they want and then use that plan on their Netflix streaming device or streamer without having to share accounts with other family members or friends.
The new three out of five plans will allow more content suitable for Netflix’s brand. Limiting their Netflix plans to only specific countries put them in a better position to negotiate with their streaming content partners and provide complete access for their customers worldwide.
Edited By- Kiran Maharana
Published By- Pawan Rajput